The decline came despite Under Armour reporting better-than-expected third-quarter earnings per share and revenue. The bearish sentiment was primarily due to the company's lowered full-year revenue outlook and news that Under Armour's accounting practices are under investigation by the Securities and Exchange Commission (SEC) and the Justice Department.
Under Armour's third-quarter revenue fell 1% year over year to $1.43 billion. Its earnings per share for the period were $0.23, up from $0.17 in the year-ago period. Analysts, on average, were expecting revenue of $1.41 billion and earnings per share of $0.18.
Meanwhile, news broke that the company's accounting practices are being investigated. An Under Armour spokesperson confirmed in a statement to Reuters that this is the case. But the company asserted that "its accounting practices and disclosures were appropriate."
For the full year, Under Armour said it now expects revenue to rise 2% compared to 2018. Management had previously guided for 3% to 4% year-over-year revenue growth. The company cited several reasons for the lowered outlook, including the impact of foreign currency and "traffic and conversion challenges in direct-to-consumer."